Because they are allowed to lend out more money than they have on reserve. It’s the very thing that makes them so farkin rich.
How does one purchase a house or start a business?
Well Paul, you have taught me something new today so thank you.
I found this site that sort of explained it to me
Ah Wim, in my Brave New World, all houses are provided by me and I run all business.
You just go on holidays, watch footy and enjoy life.
Lol.
When you say ‘provided’ you actually mean owned, yes?
The problem with benevolent dictators is who’s going to tell them when they’re getting old and cranky?
That sort of attitude is just uncalled for.
Report for re-education and remedial counselling to People’s Glorious Revolutionary Protein Reclamation Facility Number Six, citizen. Please wait in an orderly queue next to the door marked ‘Intake’.
Thanks all the same, but I think I hear Dear Leader calling.
Look behind you! It’s someone saying they’re not allowed to say Merry Christmas anymore!
If you’re gonna hate banks, you should hate their greatest ever sin against humanity.
as taylor swift once said, bankers gonna bank, bank, bank, bank, bank
Nah my Son will take over.
I hear that works in other places.
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I hope the rest of your family are…how shall I put this?
Unambitious?
Well, yes and no. It makes them ‘farkin rich’ about 19 years out of 20, then they go to zero about once every 20 years, historically speaking (absent government assistance). Banks are not immune from the basic financial symmetry of leverage.
A world without fractional reserve banking would be quite interesting:
- Bank customer: “Hi, i’d like a $500k mortgage to buy a house, can you help?”
- Bank employee: “Of course, you’ll just have to wait 20 years until John pays back his $500k principal, and then you’re good to go”.
Nope, no re-education, no counselling; well only for Fark Carlton and Journos.
And in my World, Franga plays 300 games and wins two Brownlows !!
That is a tough one Wim, not really a Christmas person, but as long as it makes you happy you can say Merry Whatever.
Peace and Love.
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Back to Bitcoin !!
Why is it needed? It seems to me only a mechanism for a few to make money from a lot of poor gullible traders.
I deal in Forex most weeks, and hate the amount of money I lose to Banks and Traders, who all take a margin. for doing very little.
True, but in that world, houses wouldn’t cost 500k.
I do get your point though.
A global currency that can be transferred instantly without the need of a third-party either storing the currency, or facilitating its transfer.
In theory, it’s the anti-banking system. You’d probably be right into it Bacchus.
Yep, houses certainly wouldn’t cost $500k, but >98% of people wouldn’t have any access to credit and would most likely operate under some form of serfdom rather more onerous than the modern day mortgage, as was generally the case across the globe until a few hundred years ago.
It depends on how you view debt, I suppose. It’s certainly good for some. But again, I do see your point. It’s hardly a simple issue.
Seeing as though my financial degree comes from the University of Wikipedia and YouTube, maybe youd be better placed to answer this. Did fractional lending work better or worse under a gold standard?
Yup, this.
Without fractional reserve banking, the only people who can get loans are those who already have capital. This is cos if a bank can only lend out money they immediately have, then they’ll only lend it to the most gold-plated borrowers.
You reckon inequality is bad NOW, a non-fractional world will blow your socks off.